Tom Bergeron//July 14, 2015//
How is this for size: Roughly 2 million outpatient visits, 700,000 emergency room exams and more than a quarter-million inpatient admissions. All from a health system with nearly 30,000 employees, 9,000 physicians and 1,000 residents and interns working in 11 acute care hospitals and three children’s hospitals in eight counties.
That’s the scope of the merger approved by the boards of Barnabas Health and Robert Wood Johnson Health System, the two systems announced Tuesday.
The merger would create RWJ Barnabas Health, the largest health system in New Jersey, with expected operating revenues of $4.5 billion.
The merger still needs one final approval from the state’s attorney general, but if Barnabas Health CEO and President Barry H. Ostrowsky gets his wish, the deal will be done by Jan. 1, 2016.
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“We’re through all of the FTC scrutiny,” he said. “Once the attorney general takes us through an evaluation of how not-for-profit assets come through a transaction to ensure they continue to be community focused and based — I would expect that process would consume the next six months — we could have our closing after that.
“I have said I’d like to see Jan. 1, 2016. That might be a little aggressive, but certainly I would expect that it would be sometime between Jan. 1 and the end of the first quarter.”
The two systems already are figuring out how they will work together.
Ostrowsky will serve as chief executive officer and president of the new company, while Stephen K. Jones, the current CEO and president of Robert Wood Johnson University Hospital and Robert Wood Johnson Health System, will serve as the chief academic officer.
A new headquarters will not be established. Instead, Ostrowsky and Jones will operate their roles out of their current facilities.
“We’re going to have effectively two headquarters,” Ostrowsky said. “The West Orange address for Barnabas Health will serve as the overall headquarters for the new enterprise and the academic headquarters for the new enterprise will be in New Brunswick.”
Ostrowsky and Jones both said the talk of the merger came out of the UMDNJ merger with Rutgers.
“A great motivating factor in creating this organization is about academics and graduate medical education, and Robert Wood Johnson University hospital is the academic medical center in New Jersey,” Ostrowsky said.
Jones agreed.
“RWJ has a long history with Rutgers’ college of pharmacy, college of nursing and the merger of UMDNJ into Rutgers gave us (the two systems) the opportunity to look at strengthening our commitment to not only academic medicine, but population health.”
And though the new system will be of an unprecedented size, Jones was quick to point out users will only see a benefit.
“Health care is local,” he said. “It’s about local hospitals and local doctors. We will continue to serve those local markets.
“What the size and scale of RWJ Barnabas Health gives us is the opportunity to increase even more the range of services we can bring — increase the work we can do together to keep people healthy and out of hospital beds by getting health information and health services.”
Ostrowsky said the merger is a step in the right direction for improving health care delivery in the state.
“The new health system will comprise effectively every clinical service from primary to quaternary and greatly strengthen our commitment to medical education and research,” he said. “The merger also will provide a large enough geography to be appropriate for the migration to population health management.”
This deal would top the recently announced planned merger of Hackensack University Health Network and Meridian Health, which will create a $3.4 billion system. Those systems signed a definitive agreement May 12 and are still awaiting final regulatory approvals. Both sides expect final approval to come in the first quarter of 2016.
New Jersey hospitals and health care systems have been on a merger march for the past few years, as the Affordable Care Act pushes them to both squeeze out costs and do a better job of keeping people healthy.
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